- The United States Department of Justice (DOJ) objected to Celsius’ motion to restart withdrawals for select customers and sell its stablecoin holdings.
- Other authorities in the United States have also objected to Celsius’ motion and wish for any critical decisions to take place only after an independent examiner report.
- The DOJ has taken multiple steps to eliminate criminal activity using crypto and recently formed a network of federal prosecutors focusing solely on the matter.
Bankrupt lending platform Celsius Network has hit another obstacle in its bid to navigate bankruptcy proceedings, as the United States Department of Justice (DOJ) has filed an objection to a motion. The DOJ has objected to Celsius’ bid to restart withdrawals for select customers and its desire to sell its stablecoin holdings. Celsius is looking to return $48 million worth of assets to customers.
The DOJ submitted the filing to the Bankruptcy Court for the Southern District of New York. William Harrington, the U.S. Trustee for the DOJ, said there was a lack of transparency and that any critical decisions cannot happen without some more insight into Celsius’ finances.
The objection follows a filing by several other American authorities, including the Vermont Department of Financial Regulation, the Texas State Securities Board, and the Texas Department of Banking, all of which objected to any sales of stablecoins by Celsius.
Harrington says that the motions are premature and should take place after an independent examiner report has been filed. The filing also states that the parties involved require additional information to assess the impact that distribution or sale would have.
The independent examiner report will cover such matters as the holdings of Celsius and its storage and “why there was a change in account offerings beginning in April 2022 from the Earn Program to the Custody Service for some customers while others were placed in a ‘Withhold Account.’”
DOJ Actively Working Towards Curbing Crypto Crimes
The DOJ has been ramping up its efforts to clamp down on crimes related to cryptocurrencies. There has been a noticeable uptick in these actions this year, including the creation of a national network of prosecutors who focus solely on cryptocurrency-related crimes. Called the Digital Asset Coordinator (DAC) Network, it consists of over 150 federal prosecutors led by the DOJ’s National Cryptocurrency Enforcement Team.
At the time it announced the new team, it also published a report on crypto crimes. The report talked about the efforts by bad actors to make use of the crypto market and proposed actions to enhance the ability to gather evidence and begin prosecutions. It also referred to the role of NFTs and DeFi in facilitating crime.
As for more action-oriented efforts, the Delaware DOJ froze funds of 23 entities involved in “pig butchering scams.” These entities were sent a cease-and-desist order, which is just part of the broader effort to take action against crypto scams.
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